Claudia Bacco, Managing Director – EMEA for RCR Wireless News, has spent her entire career the telecom, IT and security. Having experience at an operator, software and hardware vendors and as a well-known industry analyst, she has many opinions on the market. She’ll be sharing those opinions along with ongoing trend analysis for RCR Wireless News.
Telekom Austria has a lot to say on these topics. And based on the information shared in a discussion earlier this week with Guenther Ottendorfer, CTO Telekom Austria Group, these operators are ones to keep your eyes on as leaders in the European LTE race.
Telekom Austria (A1) was early to the race beginning its LTE deployment in October 2010, with an initial launch in Austria. Just about one year ago the finalization of the 800 MHz spectrum launch came to closure in what is considered one of the most competitive markets in Europe. There was a great deal of controversy around this launch and it’s worth recapping what happened before looking at where they are at today.
There were three operators vying for the spectrum — A1 Telekom Austria, T-Mobile Austria and Hutchison 3. Not only was this considered one of the most expensive auctions (Telekom Austria paid more then $1.3 billion/one billion Euro for their stake), there was a possibility that one of the three incumbents could be blocked out of the market. As a result of bidding to ensure their viability, Telekom Austria ended up with more than half of the 800 MHz band. As the regulators didn’t publish the status of the competitors’ bids during the process, there was no foresight as to where anyone was standing. Although not the original strategy to purchase this quantity of the 800 MHz spectrum, it is now very well positioned for the future with this amount of high performing LTE spectrum.
LTE coverage highlights
The 800 MHz launch began in Austria earlier this year. At this point in time about 50% of the operator’s market is covered by LTE with this growing to over 60% by year end. It also began deploying in Slovenia (Si.mobil) in 2012. Surprising to me was the level of coverage available in the market in Slovenia. Earlier this year it was also successful in purchasing spectrum in the latest round of LTE auctions, with a win of almost 50% of available spectrum. As a result, it has already reached 68% coverage in its serving area and expects to be over 90% by the end of the year.
Two months ago deployment in Macedonia (Vip mobile) began with users already starting to take advantage of the new bandwidth by showing a substantial uptick in their data usage. This seems to be an observation I’ve heard from many other operators during the initial deployment phase.
Are roaming agreements truly a hindrance to LTE success?
There has been a lot of talk about roaming agreements and how this is a limiting factor in European deployment. The United States only has a handful of operators so it’s much easier to solidify all of the LTE roaming agreements and that’s why it is ahead of Europe is a statement you regularly hear at conferences. Europe has more than ten times more operators to interoperate with; I’ve heard this reasoning many times.
I asked Telekom Austria its view on this topic and got a different viewpoint. Basically, it doesn’t think this is a problem. The way it looks at this is Europe has a higher level of 3G coverage in place then the United States and if you are roaming and you briefly go between 3G and 4G coverage, the performance change should not be that great. Whereas in the United States, there are more options to go from 2G to 4G coverage and this is a much bigger performance problem. So what’s the verdict – roaming is not an excuse for why Europe hasn’t gotten further along in LTE deployment. Glad to see an operator forging ahead and not making excuses for delays.
How to market LTE?
I worry that the average consumer may not understand what LTE can do for him. As an industry we tend to like to say things “go faster” instead of explaining the implications of going faster to my everyday life as an end user. I’ve seen our industry make this mistake over and over with new technologies and delay their adoption until the average consumer understands by using the service.
During our interview, we discussed this topic, and I found the opinion shared with me to be right on point and hope that other operators take note. Within Austria, LTE is offered within all available tariffs to allow customers to determine whether or not they want this level of service. It is not isolated a special offer. The messaging is not around going faster, but what you can do with a smartphone with a higher level of performance and with that discussion, “why LTE.” Telekom Austria was just ranked as having the best mobile network according to Futurezone’s network test, showing it is supporting its claims with a network that performs.
As we strive to go faster and faster and have the latest offers, it was refreshing to hear the following statement: “LTE is not required by everyone,” said Ottendorfer. “It is dependent upon what your daily activities are.” Ottendorfer proceeded to provide an analogy which hits the topic head on. “3G is a workhorse and 4G is a racehorse. If you’re primarily using your data to check your e-mail you’re probably OK with the workhorse. But if you’re got a big-screen smartphone and are a social media power user, then you really need to bet on the racehorse.”
NFV begins
Today Vip mobile announced a successful network function virtualization trial as the first of its kind in Europe.
Telekom Austria Group is running a number of trials across Bulgaria (Mobiltel) and Croatia (Vipnet). This is another topic where the differences between Europe and the United States come up as regular discussions. Whereas the United States is leading the LTE deployment race, it seems Europe is more focused on NFV then its American counterparts. Why? For the same reason you see the LTE activity vary in these two regions. The United States has already had to address the impact of peaks in data usage due to smartphone adoption via legacy infrastructure deployment. And as a result has the ability to take some time with NFV. Whereas Europe is now realizing this data surge and looking to NFV as a solution. IP multimedia subsystem is the starting point as detailed in the announcement. But the goal is to provide a consistent user experience to the customer and manage the operator’s usage without having to deploy capacity to support data peaks that come and go.
I expect to hear more firsts from this group of operators as these technologies progress in the European market.
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